No. 85-515 INTHE SUPREME COURT OF THE STATEOF MONTANA 1986

TEAMSTERSLOCALNO. 45,affiliated with InternationalBrotherhood of Teamsters,et al., PetitionersandAppellants,

STATEOF MONTANA, ex rel., BOARD OF PERSONNEL APPEALSAND STUARTMcCARVEL, Respondents and Respondents.

APPEAL FROM: DistrictCourt of the FirstJudicialDistrict, In and for the County of Lewis & Clark, TheHonorable Gordon Bennett, Judgepresiding.

COUNSEL OF RECORD:

ForAppellant: Hilley & Loring; Emilie Loring,Great Falls,Montana

For Respondent: DanielJ. Stevenson,Dept. of Labor, Helena,Montana Poore,Roth & Robinson; DouglasBuxbaum, Butte, Montana

Submitted onBriefs: May 30, 1986 Decided: August 28, 1986Mr. Justice John C. Sheehy delivered the Opinion of the Court.

The Union appeals from the opinion and order and judgment entered by the DistrictCourt of the First Judicial District,Lewis and Clark County,which affirmed the decision of theBoard of PersonnelAppeals. We affirm. Stuart McCarvel was a bookmobile driver for Great Falls from 1976 to 1978. He received his firstpaycheck on March 5, 1976. Although he had worked a 40 hour work week,hewas paid at the rate provided in the collective bargaining agreement for bookmobile drivers for only 20 hours. He was paid at the clerical rate whichwas about $2.00 less per hour for 20 hours. McCarvel went to the Union Hall the same day and sought to file a grievance. Under the terms of the collective bargaining agreement, "agrievance involvingwages must be raised within ten (10) calendar days following the event giving rise to such grievance or be forever waived." The Union refused to file a grievance. McCarvel attempted to file grievances again in May, 1976, December, 1976, and February or March, 1977. He was refused at all times. McCarvel tried numerous times to reach the Union's business agentwhowould not returnMcCarvel's call. Inthe course of these proceedings McCarvel learned that ten yearsearlier the Union and the library worked out an oral side agreement whereby drivers would be paid for 20 hours at the Union driver's rate and 20hours at the library's nonunion clerical rate.In February, 1977,McCarvel met with the Union business agent who stated that the Union was preparing for negotiations with the city and that filing a grievance would"rock theboat." Thebusiness agent stated theywould try to straighten the matter out during negotiations. Negotiations were unsuccessful and the Union struck the city from July 1 to July 26, 1977. Near the end of the strike the business agent told McCarvel that negotiations would not settle the matter, so the grievanceprocedure should be used. McCarvel filed an unfair labor practice charge against the Union on August 8, 1977. On the same day, the Union filed McCarvel's grievance. The Union processed the grievance through the grievance committee which was composed of three citymembers and three Union members. It deadlocked. The Union could then have taken economicor legalaction. Itdid neither and the grievancewaswaived. McCarvel pursued his unfair labor practice claim and on November 30, 1978 the hearing examiner entered findings of fact, conclusions of law and a recommended order. The parties had agreed to bifurcate the liability and remedy issues, so the hearing examiner's initial order was limited to the liability issue. She found the Union had failed to fairly represent McCarvel by failing to accept and process his grievance. On February 22, 1979, the Board of Personnel Appeals affirmed the hearing examiner and ordered an additional hearing to determine remedies. Prior to this hearing, however, the Union filed a motion to dismiss the charges before the Board, claiming the Board had no jurisdiction to decide the case. The Board refused todismiss the chargeand the Union appealed that ruling to the District Court. The District Court held the Board lacked jurisdiction and dismissed the case. The Board appealed to this Court and we reversed. Teamsters Local 45 v. State ex rel. Board ofPersonnel Appeals (1981)

## , 195Mont. 272, 635 P.2d 1310. The District Court remanded the matter to the Board fora hearing

on remedies. After that hearing, the examiner entered proposed findings and conclusionsand recommendedMcCarvelbe awarded $8,353.17. The Board issued its decision December 16, 1983, adopting the examiner's findings and ordering the Union to pay lesser damages of $7,540.00 in accordance with the apportionment scheme approved in Bowen v. U.S. Postal Service (1983), 459 U.S. 212, 103 S.Ct. 558, 74L.Ed.2d 402. The Union filed for judicial review on January 16, 1984. Because the prior district court action on this matter involved considerationof the issue of jurisdiction only,the District Court reviewed the Board's unfair labor practice decision as well as the decision on remedies. The District Court affirmed the decision of the Board in its entirety. The Union appeals. The Union raises five issues forreview. First, whether the District Court erred in approvingdamages for theperiod of McCarvel's employmentprior to February 8, 1977. Second, whether the District Court erred in affirming damages after August 8, 1977. Third,whether the District Court erred in affirming the Board's notice requirement. Fourth, whether the District Court erred in affirming the Board's finding the Local failed to fairly represent McCarvel in handling his claim for overtime pay. Last, whether the District Court erred in affirming the Board's conclusion the "Union's conduct was so unreasonable and arbitrary as to constitute a breach of theduty of fairrepresentation." We begin with the standard of review governing this appeal. The Board's order is subjectto reviewby a district court pursuant to § 39-31-409,MCA. The order of a districtcourt is subject to reviewby this Court pursuant to the same section. The standard of review at both levels is set by § 39-31-105,MCA, which states that theMontana Administrative Procedure Act (MAPA) applies. Section 2-4-704, MCA, sets forth the MAPA standards of review. Specifically, factual findings will be upheld if they are not clearly erroneous, that is if they are supported by substantial evidence on the whole record. In reviewing legal questions, the standard of review is abuse ofdiscretion. City of Billings v. Billings Firefighters (1982),200Mont. 421, 651P.2d 627. The first issue raised by appellants is whether the District Court erred in approving damages for the period of McCarvel

### 's employment prior to six months before the claim

was filed. Section 39-31-404, MCA, states: No notice ofhearing shallbe issued based upon any unfair laborpractice more than 6 months before the filing of the charge with the board unless the person aggrieved thereby was prevented from filing the charge by reason of service in the armed forces, in which event the 6-monthperiod shallbe computed fromthe day ofhis discharge. This statute does not address damages; it is a statute of limitations for charges based onunfair laborpractices. In this case we agree with the District Court that the unfair labor practicewas a continuing courseof conductwhichbegan

on March 5, 1976, when McCarvel received his first paycheck and the Union refused to file a grievance,and continued on untilwellpast the time theunfair laborpractice chargewas filed in August 1977. Thus the charge was filed within the six month statute of limitations. Once the unfair labor practice is established, the issue of damage arises. The District Court affirmed the award of damages beginning on February 17, 1976 and running until June 30, 1978 which constitutes the entire time McCarvel worked for the city.TheUnion argues theback pay shouldhave been limited to six months prior to August 8, 1977 (the date the charge was filed.) The District Court noted the National Labor Relations Board (NLRB)has not taken a consistent position on back pay. At times, it limited back pay to sixmonthsprior to the date the charge is filed. Nelson-Hershfield Electronics (1971), 188 NLRB 26, 77 LRRM 1013. In other cases, the court awarded back pay for the entire time the grievant suffered a wage loss due to the Union's failure to process a grievance. IBEW, Local 2088 (Federal Electric Corp.) (1975), 218 NLRB 396, 89 LRRM 1590; Abilene Sheet Metal, Inc. v. NLRB (5th Cir. 1980), 619 F.2d 332. In allowing damages prior to six months before the charge was filed, the District Courtheld itwould be manifestly unfair to the grievant to limit the damages and would reward the Union for its procrastination. We agree that this is a proper case to allow damages beyond the six month limit. The second issue raised by appellant is whether the District Court erred in affirming damages after the wage grievance was filed on August 8, 1977. The Union argues it processed McCarvellsgrievance properly once it was filed, thus it should not be liable for the damages incurred after the grievancewas filed. The District Court affirmed the hearing examiner's findings that the Union by its inaction cut off the only

avenue open to them to get a determination of the merits of the grievance. The hearing examiner relied on Clerks and Checkers Local 1593, International Longshoreman Association

(1978), 234 NLRB 511, 98 LRRM 1328, and IBEW, Local 2088 (1975), 218 NLRB 396, 89 LRRM 1590, which held that in aduty of fair representationcasewhere the union failed toprocessa wage grievance, the union's liabilitywill cease on the day of final disposition of the grievance. The District Court affirmed the Board's award of damages from the timeMcCarvel began his employment until he ].eft it. We find no abuse of discretionon the part of the DistrictCourt. The third issue raised by the appellant is whether the District Court erred in affirming the Board's notice requirement. The Board ordered the Union tomail this notice to "all employees in the bargaining unit of theCity ofGreat Falls:I' After a hearing at which both sides had an opportunity to present evidence and state their positions, the Board of Personnel Appeals found thatwe have violated theCollective Bargaining Act for Public Employees and has ordered us to mail this notice to each member of the bargaining unit. WE WILL NOT fail or refuse to fairly represent any employees represented by us or arbitrarily fail or refuse to fileandprocess any employee's grievance on a fair basis or refuse to inform employees of the statusof theirgrievance. WE WILL make Stuart Thomas McCarvel whole for the loss ofpay he suffered as a resultof ourunlawful refusal to considerorprocess his grievance. INTERNATIONALBROTHERHOOD OF TEAMSTERS,CHAUFFEURS, WAREHOUSEMENAND HELPERSOF AMERICA, LOCAL 45 The Union argues the order is in excess of the Board's jurisdiction. Section 39-31-406, MCA, gives the Board discretion to ntake such affirmative action

# .. .as will effectuate thepolicies of this chapter." Postingofnotices is more common but the NLRB has required the mailing of notices to all employees. NLRB v. H. W. Elson ~ottling Co. (1967), 379 F.2d 223. The District Court held the egregious behavior of the Union in refusing to file the grievance for 17months justified the Board's remedialorder. TheDistrict Courtwent on to state:The bargaining unit involved here is a broad, multicraft unit representedby the Public Employees Craft Council. The Union's membership constitutes only a portion of the bargaining unit. Because this unfair labor practice involves only the Teamsters, it is difficult to see how mailing notice of the violation to all members of the bargainingunit will effectuate the policies of the statute. But the choice of the Board will not be disturbed unless it canbe shown that the order is a patent attempt to achieve ends other than whose

[sic] which can fairly be said to effectuate the policies of the statute. (NLRB v. Electrical Workers,Local 3, F.2d 

## ,115 ERM3436 (2nd Cir. 1984)

# . N; such showingTasbeen made in this case. The District Court did not abuse its discretion in this finding. The fourth issue raised by appellant is ~rhetherthe District Court erred in affirming the Board's finding a failure to fairly represent McCarvel in handling his claim for overtime pay. The Union contends McCarvel failed to provide the business agent with sufficient records of the overtime he worked. However, the record shows McCarvel attempted to supply his time sheet to the Union but the business agent brushed the offer aside saying he believed him. The Union also argues that McCarvel got compensatory time rather than overtime in accordance with librarypolicy. However, the rights of the parties were set forth in the collective bargaining agreement which provided for overtime Pay The library could not unilaterally modify that agreement. The District Court was correct in affirming the Board's order. The fifth issue raised by appellant is whether the District Court was correct in affirming the Board's conclusion that the Union conduct was so unreasonable and arbitrary as to constitute a breach of the duty of fair representation. A union's duty of fair representation is a.judicially created doctrine first recognized in the context of the Railway Labor Act in Steele v. Louisville & Nashville Railroad Co. (1944), 323 U.S. 192, 65 S.Ct. 226, 89 L.Ed. 173. Steele required the Union to represent its individual members "without hostile discrimination, fairly, impartially and in good faith." 

### - Id. at 204, 65 S.Ct. at 232, 89 L.Ed. at 184. The Steele principle was later extended to bargaining representations under the National Labor Relations Act

(NLRA)

# . Syres v. Oil Workers InternationalUnion, Local 23 (1955),350 U.S. 892, 76 S.Ct. 152, 100 L.Ed. 785. TheNLRB first recognized a breach of the duty of fair representation

as an unfair labor practice in Miranda Fuel Co. (1962)

## , 140 NLRR 181, 51 LRRM 1584,reasoning the privilege to act as an exclusive bargaining representative granted in S 9 of the NLRA necessarily gives rise to a corresponding § 7 right in union constituents to fair representation by the exclusive representative. Although the duty of fair representation

arose in the context of racial discrimination, the doctrine has been expanded to include arbitrary conduct by a union toward bargaining unitmembers. In Vaca v. Sipes (1967),386 U.S. 171, 87 S.Ct. 903, 17 L.Ed.2d 842, the United States Supreme Court stated the controlling test for breach of the union duty of fair representation: "A breach of the statutory duty of fair representation occurs only when a union's conduct

# . . . is arbitrary, discriminatory,or inbad faith." Id. at 190, 87 S.Ct. at 916, 17 L.Ed.2d at 857. 

### - Thus it is settled under federal labor law and therefore under Montana labor law that a union may not arbitrarily ignore a meritorious grievance orprocess it in a perfunctory

manner. Id. at 191, 87 S.Ct. at 917, 17 L.Ed.2d at 858. 

### -In her examination of the Union's conduct in this case, the hearing examiner found the only excuses offered McCarvel for the Union's refusal to accept the grievance
were: (1) the existence of an oral agreement; (2) the problem would be taken care of at the bargaining table; and, (3) pressing the grievance would upset contract negotiations with the city. These excuses were found "clearly specious" because (1) the oral agreement did not cover overtime and could not be used as an excuse to refuse the grievance, since the right of an employee to theminimum wage provided in the written agreement was an individual right which could not be taken away by an oral agreement between the employer and a union official (Eversole v. La Combe (1951), 125 Mont. 87, 231 P.2d 945); (2) since the contractprovided forovertime, failure to award overtimewas a contract violation and required no further negotiations; and, (3) negotiationswere only part of theUnion's duty to itsmembers. Having so found,thehearing examiner concluded the Union's action was arbitrary in that the Union advanced no substantial reason for its failure to accept the grievance, to make a good faith investigation,and to submit the grievance for an organized screening process. Contrary to the Union's assertion, the hearing examiner did not find mere negligence in the Union's handling of the grievance. Recognizing that the business agent's inaction in returning telephone calls could be considered passive and therefore negligent conduct, the hearing examineremphasized, "However, this inaction combined with his subsequent statements to McCarvel indicate an active, intentional avoidance of accepting the grievance." Even unintentional acts or omission by union officials may be considered arbitrary ifthey reflect reckless disregard for the rights of individual employees, if they severely prejudice the injured employee and if the policies underlying the duty of fair representation would not be served in shielding the Union from liability in the particular case. Robesky v. Qantas Empire Airlines Limited (9th Cir. 1978), 573 F.2d 1082, 1088-90. The more meritorious the grievance the more substantial the reason must be to justify abandoning it. Gregg 

### v. Chauffeurs, Teamsters and Helpers Local 1.50 (9th Cir. 1983), 699F.2d 1015, 1016. We can think of few issues

more meritorious and important to an employee than the issue of pay. The District Court's conclusion that the Union's conductwas so unreasonable and arbitrary as to constitute a breach of theduty of fair representationis firmly supported by the lawand the facts. We affirm the judgmentof the DistrictCourt.

We Concur:

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